MILAN, April 19 (Reuters Breakingviews) - Worldline’s (WLN.PA) boss Gilles Grapinet has spotted an opportunity to access a hard-to-crack payments market. The $12 billion group announced on Wednesday plans to set up a joint venture with French lender Crédit Agricole (CAGR.PA), which was looking for a new payments ally after ditching a past accord with bankrupt Wirecard. A partnership with Crédit Agricole will allow Worldline to enter Europe’s top market for merchant payments, which several domestic banks still handle directly. The joint venture, set to be operational in 2025, will see Worldline owning 50% plus one share, with investment of 80 million euros split between the two players.
Analysts reckon the French bank will confer its entire merchant acquiring business to the new company. Adding Crédit Agricole’s annual transaction volume, worth $200 billion in 2021 according to Nilson, would bring Worldline’s total to around $650 billion, giving it a market share in the retail segment of 12%, on a par with European payments leader Nexi (NEXII.MI), Jefferies reckons.
For Worldline, the deal may be a stepping-stone to make similar accords with other French lenders or even purchase the whole of Crédit Agricole’s payments business over time. The company’s shares have underperformed the STOXX Europe 600 index (.STOXX) by nearly 20% since Russia’s invasion of Ukraine amid concerns about lower consumer spending and as technology groups have fallen out of favour with investors. But this deal shows that payments companies still have some scope for dealmaking to improve their fortunes. (By Lisa Jucca)
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